BACKGROUND

Managing bank failures is costly and complex. One way of mitigating the cost of bank failures is through the role of deposit insurance schemes. Deposit insurance schemes facilitate the payout of insured deposits. In order to effectively play this role, deposit insurance schemes need to have proper systems for the investment of deposit insurance funds. The International Association of Deposit Insurers (IADI) Core Principles for Effective Deposit Insurance Systems emphasise the importance of clearly defined and sound investment and management of deposit insurance funds. Essential Criteria 6 of Principle 9 (Sources and Uses of Funds) states that the investment policies of a deposit insurer must ensure the preservation of fund capital and maintenance of liquidity and adequate risk management policies and procedures, internal controls, and disclosure and reporting systems. Overall, a deposit insurer must have readily available funds and all funding mechanisms necessary to ensure prompt reimbursement of depositors’ claims.

In line with its focus on strengthening the financial systems of member countries in the wake of the COVID-19 shock, MEFMI will host a workshop on Investment Processes for Deposit Insurance Schemes.

OBJECTIVES

The main objective of this workshop is to enable participants to design and implement investment and risk management policies that comply with IADI Principles for Effective Deposit Protection at their respective institutions.